Hospitality Industry in Japan - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The rapidly growing tourism sector in Japan has been contributing to the expansion of the hospitality industry. Japan has been recording the highest number of visitors year-on-year and the country is expanding its hospitality industry to accommodate the increasing number of visitors. With the limited available spaces for development, the country has introduced a capsule hotel concept, which accounted for around USD 132 million in 2018. Domestic tourism is on the rise in Japan, and to cop up with that, many domestic brands are expanding their footprint across the country. Tokyo, which is among the major cities in the country, has been registering a growing number of inbound tourists, with around 14.12 million in 2018, which was almost double to the number it welcomed in 2013. Oska and Chiba have also been witnessing rising numbers of arrivals year-on-year. The country has been recording the highest occupancy rate every year at around 80%. Though the tourism statistics look promising, the limited geographically available space for new developments is going to be a limitation for the hospitality industry in Japan.

Key Market Trends

Rising Number of Tourists have Driven the Market

According to the Japan National Tourism Organization, in just four years, the country registered double the number of visitors it welcomed in 2014, which was 13.41 million. In 2018, it welcomed 31.19 million tourists and is aiming to host 60 million visitors by 2030. Visitors from China constituted the highest share of foreigners that visited Japan, followed by South Korea and Taiwan.

Mid and Upper Mid-scale Segment Hotels are Dominating the Market

Japan has more than 2,600 hotel establishments that are distributed across the country, of which, the luxury hotels segment constitutes around 50 hotels only. Whereas the budget and economy hotels segment covers around 110 hotels and became the second-largest segment of Japan’s hospitality industry. The country has around 2,240 hotels in the mid and upper mid-scale segment. The dominant domestic tourism, the quality services offered by majority hotels of the mid and upper mid-scale segment, and effective utilization of the available space have become the major reasons for the rapid growth of this segment.

Competitive Landscape

The hospitality industry in Japan is largely dominated by homegrown hotel companies. The domestic brands and their chains constitute around 90% of the total market share. Tokyo Inn Co. is the largest hotel chain in the country, in terms of rooms/keys supply. It has more than 250 hotel properties and offers around 50,000 rooms/keys across the country. Route-Inn Hotel has more than 275 hotel establishments and offers around 14,500 rooms/keys across Japan. Marriott International is the largest international brand in terms of room supply, with around 40 establishments, and offers around 12,000 room/keys.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support